October 29, 2014

The Business of Editing: Fee Negotiations (Part III)

Part I addressed the first three preparation steps: (1) know your required effective hourly rate (EHR); (2) know your churn rate; and (3) establish your workweek parameters. Part II took us further along the preparation path, getting us through six additional steps: (4) determining what constitutes a page; (5) calculating the project’s size; (6) knowing the schedule the client expects; (7) determining how many editing days you will have; (8) calculating the churn rate that will be required to meet the schedule; and (9) determining what difference editing on weekends and/or holidays will make. Now, in Part III, we complete the calculations and put together our negotiation package.

Step 10: Calculating the Price

With all of the information gathered in the previous nine steps, we can calculate the price for the project. Although I have been working toward a per-page rate, you can as easily determine an hourly rate. (A project rate is simply the final calculation of number of pages times the per-page rate.)

Using the dates in the example in in step 7, your client comes to you on October 9 and says it has a manuscript that is 425 pages, an easy edit, but that must be completed by October 21 and asks for a price to do the edit. The first thing to do is ask for the complete manuscript so that you can do an independent page count.

We know that the likely number of editing workdays is 6 (step 7). That means you need to churn (step 8) approximately 71 pages per day (425 ÷ 6) or (assuming your workday is 5 hours) 14+ pages an hour (71 ÷ 5). We know that your churn rate is 10 pages an hour (step 2), so that based on the client’s count you would need to work approximately 50% faster to meet the client’s schedule and adhere to your established workweek.

Of course, when you do your own page count, you might find that, as I usually do, the client has underestimated the size of the manuscript. Here you have done the count (step 5) and discovered that the true page count, using your formula (1,600 characters = 1 manuscript page), is 631. This changes the required churn rate (step 8) from 71 to 105 per day (631 ÷ 6) or (assuming your workday is 5 hours) 21 pages an hour (105 ÷ 5). This is more than double your normal churn rate of 10 (step 2).

If we add the weekends to the editing time (4 days), the number of editing workdays increases from 6 to 10. That changes the calculations as follows: the required churn rate (step 8) to 64 per day (631 ÷ 10) or (assuming your workday is 5 hours) 13 pages an hour (64 ÷ 5). This is still more than your usual churn rate. The last option is to add in the holiday, which changes the calculations as follows: the number of editing workdays increases to 11, making the required churn rate 58 per day or 12 per hour — the 1 additional day doesn’t make much difference.

The question is what should be your minimum per-page rate for this project which has an increased required churn rate. A required churn rate of 12 pages an hour is a 20% increase required speed. Consequently, your per-page rate should also increase 20% so as to compensate you for the required churn rate; that is your minimum per-page rate should be $5.04.

However, this works only if you work weekends as well as your normal workweek. So we need to know what would be the rate for your normal workweek. The required churn for your standard workweek is 21, which is 210% faster than normal. If we apply this to your required EHR, your minimum per-page rate comes to $8.82.

The question now becomes: What is giving up your weekends worth? That is, what premium needs to be charged for that sacrifice. This is subjective; we all value such time differently. For this essay, let’s say the premium should be 20%. That would make the per-page fee $10.59. This becomes the starting point for the price negotiation.

I’m sure you are asking why we had to know the required EHR; after all, we could have come to this same point without it. But we couldn’t have. Based on surveys I have done of colleagues, editors who haven’t calculated their required EHR generally charge less than that number and when they are faced with the situation here, generally just do a multiple of what they normally charge. But the required EHR has to be the basis so as to ensure that you are not losing money.

The next calculation you can do is based on your wanted EHR. It is done the same way and it can be the basis for the negotiations to come, but under no circumstance should your basis be less than your required EHR.

Putting It Together

The next step is to put all the information and your requirements in a negotiation email. Such an email might look similar to this:

I have looked at the files and completed a page count. The page count for Smith & Jones is 631 manuscript pages, which is 48% greater than your estimate of 425. (The formula used to calculate a manuscript page is 1,600 characters without spaces = 1 manuscript page.) Just to let you know, in skimming the manuscript I noted these problems, which concern me: ______________. I also noted that several of the chapters will require heavy editing.

The schedule is exceedingly tight. As I have expressed to you previously, my normal workweek is Monday to Friday, excluding holidays. A normal editing workday consists of 5 editing hours. I would have at most 6 editing workdays to edit this manuscript. That means I would have to edit 105 pages a day or 21 pages an hour. The schedule is simply too tight and the problems too many to edit at such a rate and still assure a high-quality edit.

The only reasonable way to do this project is to work weekends as well as normal editing workdays. Adding weekends adds 4 additional editing workdays. That reduces the editing rate to 64 pages a day or 13 pages per hour, a significantly more reasonable editing rate and one that, although still high, I believe would permit a high-quality edit. Because of the need to work outside my normal workweek, and because I believe in providing only high-quality editorial work to clients, the rate for this project will be $11 per manuscript page.

Although not a perfect solution (nor a perfect email) the foregoing process has proven itself, in my experience, to be a successful way to negotiate a higher rate because the request for the higher rate can be justified. It may well be that you will need to negotiate down from the initial price you demand, but at least you will have the facts at your fingertips and you can knowledgeably determine what your bottom-line price will be.

Page rate of $11 and estimated throughput of 13 pages per hour yields $143 per hour. That’s a nice rate, to be sure, but (1) I sure wouldn’t give that information to the client (if I’m charging a page rate or flat fee, I don’t inform clients of my expected hourly rate — I’m already risking my hourly rate, and that’s enough of a risk in negotiations) and (2) I have well-paying clients, but none of them would knowingly pay me $143 per hour, even for weekend work.

If our hypothetical freelancer only has to charge $42 (required) or $50 (desired), why quote a page rate that might outprice the bid when the freelancer would meet her or his goals with a lower page rate? The freelancer could quote the usual rate of $5 per hour (for this freelancer’s usual churn rate of 10 page per hour and goal of $50/hr — information not shared with client) with a revised due date and also the option of meeting the rush deadline for an additional fee, either a percentage of the usual page rate or an additional flat fee. Even at, say, a 50% premium rush rate, that would bump up the page rate to only $7.50 per page, and at 13 pp/hr (the freelancer’s rush page rate), that yields $97.50 per hour.

My experience has been that the initial rate I quote is not the final rate; it represents a starting point for the negotiations, which is what I had hoped to communicate, but apparently did not. The likelihood is that I would end up where you suggest, but if I start where you suggest, I would likely end up lower.

The other issue is how much is my off-duty time worth to me. Personally, I would prefer the client to not want me to work weekends or holidays or longer hours than my normal workday. I have other things I’d rather do such as play with my grandchildren. So to get me to work those hours requires a big incentive.

You ask about telling you r clients, even indirectly, what your hourly rate will be. In fact, that is the ideal hourly rate, not necessarily the true hourly rate. What I mean is this: If I tell a client that I will have to edit 13 pages an hour to meet the schedule, it doesn’t mean that I can actually or will actually edit at that speed. I might be able to edit at 20 pages an hour or 5 pages an hour, but for purposes of calculation 13 is the number. If I don’t tell them this, they see no reason why I can’t edit faster and cheaper and still provide the quality they expect.

As for outpricing the bid, none of these numbers (except the required EHR) are cast in stone. Twenty-five years ago, I might not even have asked for a premium. Everyone has to balance needs against numbers. The numbers used are just an example, they are not intended to be taken as gospel. It is as reasonable to bid your desired EHR as to bid any other number, as long as you realize that clients will want to negotiate down from wherever you start the bid.

Finally, I do not understand why you think $97.50 would be an acceptable rate either. The answer, of course, is that it depends on the client. We both know freelancers who are able to command from some corporate clients a standard pay of $10 per page whereas some academic clients want to pay $2 per page.

The ultimate goal, in my case at least, is to get clients to rethink schedules to avoid these premium prices. I prefer to have a more normal, more relaxed schedule and receive less compensation.

Yes, I agree with you about scheduling and charging more for work that necessitates night, holiday, and weekend work. How we negotiate this depends on the client. Some wouldn’t bat an eye at $11 an hour, for regular or premium rush work. If you’re negotiating with one who would pay $5 or less, it would be hard to get $11 out of them, but saying you’d do it for $5 with a 50% rush rate might work, if that is still an acceptable price, which it looks like it is for the hypothetical freelancer used in the example. I’m not saying that $97.50 is better than $143 per hour — just that clients can do the math if you give them a pages-per-hour number. I’ve found that if I give clients any sort of rate estimate — or if they find one someplace else — it becomes written in stone in their minds (a generality, I know, but that’s been the case in my experience). I recently had to justify my rates for direct work for authors who had found a copyediting rate on the Internet and wanted to know why mine was higher. After I explained, and also ran several scenarios based on their numbers (which were ranges), I did get the work, even though I was not the lowest bidder. (I had already invested so much time in the bid that I felt that doing these calculations was worth it; I might not always spend so much time on a bid, though.) So, I’m not saying by any means that we should cheat ourselves out of good pay (my goal is the opposite!), but that negotiations are sometimes difficult, and clients sometimes need a lot of assurance that we’re worth what they may think is a lot of money.

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